The days of making exceptions for long-standing clients on underwriting have all but disappeared, says Registered Insurance Brokers of Ontario President Bob Carter – and that is hurting independent brokers.
“There used to be some flexibility in making decisions on the underwriting,” says Carter, “but not anymore. It used to be you as an independent broker had the discretion to override the underwriting and pay out to a good client. But that just doesn’t happen that much anymore.”
He has seen a noticeable shift in the underwriting in the last decade, with a more “by the book” attitude coming from the larger companies.
“Doing it all by the book, that has become much more noticeable now,” he told Insurance Business. “That coincides with all the mergers and acquisitions that have been going on in the last five to 10 years. Today you have fewer companies, and fewer options.”
Carter, who is in his final year as head of RIBO and a partner with The Mitchell & Abbott Group Insurance Brokers in Hamilton, Ont., says it just may be time he put up the Gone Fishin’ sign.
“I’m near retirement age, and for me a lot of the fun has gone out of the business,” he says. “It just may be time to call it quits.”
The recent acquisition of Hub International by the private equity firm Hellman & Friedman made quite a splash in the industry – as Hub itself had been noted for its predilection of buying up smaller brokerages in the past. Currently Hub employs more than 6,500 people in the United States, Canada and Brazil, and is expected to have revenues this year in excess of $1.2 billion.
But for Carter, he laments what he sees as the true independent spirit and freedom of brokers disappearing in the face of ever-larger insurance broker networks.
“The major clients understand the game has changed, but it is hard for the everyday client,” he says. “Today, if you have a large company and the volume is there, and has been there for years, then you do have that freedom on a policy still. Sure, you do get exceptions if you plead the case for a valued client – but you have to go higher up the ladder.”
